NEW YORK - Iran is facing severe internal unrest due to the international economic sanctions, which could lead to the regime's overthrow, Foreign Minister Avigdor Lieberman said on Saturday.

In an interview with Haaretz, Lieberman also predicted that Israel's elections would be brought forward to the first third of 2013. He termed Palestinian President Mahmoud Abbas' speech to the UN General Assembly last week "worse than a slap in the face."

"The opposition demonstrations that took place in Iran in June 2009 will come back in even greater force. In my view, there's going to be an Iranian-style Tahrir revolution," he said, referring to the protests in Cairo's Tahrir Square that brought down Egyptian President Hosni Mubarak. "The young generation is sick of being held hostage and sacrificing their future."

Though Lieberman's views haven't changed much, his tone was a bit more moderate than in the past. In fact, some of his responses were downright diplomatic.

Lieberman has been trying hard to tone down Israeli-American tensions over Iran, believing they are harmful to both countries. Though he refrained from criticizing Prime Minister Benjamin Netanyahu, it seems clear he doesn't agree with everything Netanyahu has done.

"There's no alternative to a genuine, serious ally like the U.S.," he said. "We have differences of opinion, but in the end, what we have in common is much greater than what divides us. In my view, the dialogue with the Americans shouldn't be through the media."

Lieberman's views on whether Israel should attack Iran remain a well-kept secret. He prefers talking about international sanctions. Last week, Haaretz published an internal Foreign Ministry document that concluded that sanctions have hurt Iran's economy much more than previously thought.

Lieberman revealed that aside from intelligence reports and diplomatic cables, he receives periodic briefings from friends and acquaintances - businessmen and diplomats from the former Soviet Union - who travel regularly to Iran.

"The situation in Iran, and the feelings of the man on the street, is one of economic catastrophe," he said. "Just this week there was another devaluation of the Iranian rial .... There's a shortage of basic goods, a rise in crime, and people are trying to flee the country, sending money abroad."

According to Lieberman, "Based on my conversations with people who visit Iran, if you held a referendum - the nuclear program or quality of life - 70 to 80 percent would choose the second option. It's not that they're opposed to the nuclear program, but they aren't willing to pay these crazy prices."

In short, Lieberman thinks sanctions are working, and if ratcheted up further in the months remaining before Iran's presidential election in June 2013, could even help topple the regime.

At the United Nations, Lieberman urged diplomats to prepare for a new outbreak of protests in Iran. If it happens, he said, the West must be ready to support the demonstrators both politically and economically.

"Last time, the West didn't expect it and was confused," he said. "This time, it could lead to the fall of the regime. Israel must not interfere."

Still, Lieberman praised Netanyahu's UN speech. "You can laugh, but everyone is talking about ... the red line" Netanyahu slashed through a cartoon-like drawing of a bomb, he said.

Regarding the Palestinian Authority's bid for UN recognition as a nonmember observer state, Lieberman said Israel couldn't prevent the UN General Assembly from approving it, but "we'll exact a price" from Abbas.

For months, Lieberman has called for Abbas to be replaced. The fact that Abbas accused Israel of commiting ethnic cleansing in the West Bank and of planning "a new Nakba [catastrophe]" only helped Lieberman portray him as someone who is not a partner for peace.

"His speech was more than a spit in the face," Lieberman said. "The second time we transferred to him a down payment that would allow him to pay the PA workers' salaries, he didn't even say a single word of thanks. I told the French foreign minister all the things we did [to help the PA] in recent months, and he wasn't aware of all this. Everyone has woken up."

"I wish," Lieberman added when asked what would happen if Abbas resigned.

Lieberman says the Arab states are also tired of Abbas, and the Saudis and Qataris have stopped transferring funds to the PA because they don't want to see their money go to waste.

When asked about the chaos that might ensue if Abbas left, Lieberman said: "There's chaos right now. "Abbas is just getting in the way. He's neutralizing [Palestinian Prime Minister] Salam Fayyad, taxes aren't being collected and militias are returning to operate in the Palestinian cities."

Lieberman says Israel must stop "artificial" attempts to support Abbas, which prevents a new leadership from flourishing and increases the danger that Hamas will take over the West Bank.

He says he is in contact with Palestinian figures who warn that Hamas intends to take control. Lieberman refuses to say who these Palestinians are, but at least some are probably connected to the opposition to Abbas such as former Yasser Arafat adviser Mohammed Rashid and former leading Fatah official Mohammed Dahlan.

"There are enough alternatives in the PA today that are not Hamas," he said. "I speak to some of these people and they say Israel and the United States are keeping Abbas [in control]. Abu Mazen [Abbas] is lost. His time has passed. There's no need to wait, unless we want to deliver the keys directly to Hamas."

Regarding the Israeli elections, Lieberman said he would prefer that they be held a year from now, as scheduled. But he expects it will prove impossible to pass the 2013 budget in the coming months, and that would force the elections to be held early - most likely in February or March.

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